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Derivative and Hedging Instruments (Tables)
 3 Months Ended
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Gross Notional Volume of Open Derivatives

The gross notional volume of open derivatives is as follows:

 

 

 

March 31, 2022

 

December 31, 2021

Commodity derivative contracts

 

 

369,960

 

 

MWh

 

 

278,000

 

 

MWh

Commodity derivative contracts

 

 

3,260,000

 

 

Dth

 

 

5,735,000

 

 

Dth

FTRs

 

 

858

 

 

MW

 

 

2,127

 

 

MW

PPA

 

 

100

 

 

MW

 

 

250

 

 

MW
Fair Value of Derivative Instruments on the Balance Sheet

The following table summarizes the fair value of the derivative instruments on the consolidated balance sheets. All derivative instruments in this table are presented on a gross basis and are calculated prior to the netting of instruments with the same counterparty under a master netting agreement as well as the netting of collateral. For financial statement purposes, instruments are netted with the same counterparty under a master netting agreement as well as the netting of collateral.

 

 

 

Derivative

 

 

Derivative

 

 

 

(In thousands)

 

Assets

 

 

Liabilities

 

 

Balance Sheet Location

March 31, 2022

 

 

 

 

 

 

 

 

Commodity derivative contracts(a)

 

$

9,518

 

 

$

325

 

 

Other current assets

Commodity derivative contracts(a)

 

 

626

 

 

 

32

 

 

Other deferred charges

FTRs(a)

 

 

—

 

 

 

16

 

 

Derivative liability (current)

PPA

 

N/A

 

 

 

130

 

 

Derivative liability (current)

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

Commodity derivative contracts(a)

 

$

2,959

 

 

$

811

 

 

Other current assets

Commodity derivative contracts(a)

 

 

420

 

 

 

38

 

 

Other deferred charges

FTRs

 

 

227

 

 

 

—

 

 

Other current assets

PPA

 

N/A

 

 

 

2,140

 

 

Derivative liability (current)

 

(a)
As of March 31, 2022 and December 31, 2021, MGE received collateral of $6.9 million and $1.3 million, respectively, from counterparties under a master netting agreement for outstanding exchange traded derivative positions. The fair value of the derivative asset disclosed in this table has not been reduced for the collateral received.
Offsetting Assets

The following tables show the effect of netting arrangements for recognized derivative assets and liabilities that are subject to a master netting arrangement or similar arrangement on the consolidated balance sheets.

 

Offsetting of Derivative Assets

(In thousands)

 

Gross Amounts

 

 

Gross Amounts Offset in Balance Sheets

 

 

Collateral Posted Against Derivative Positions

 

 

Net Amount Presented in Balance Sheets

 

March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivative contracts

 

$

10,144

 

 

$

(357

)

 

$

(6,911

)

 

$

2,876

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivative contracts

 

$

3,379

 

 

$

(849

)

 

$

(1,254

)

 

$

1,276

 

FTRs

 

 

227

 

 

 

—

 

 

 

—

 

 

 

227

 
Offsetting Liabilities

Offsetting of Derivative Liabilities

(In thousands)

 

Gross Amounts

 

 

Gross Amounts Offset in Balance Sheets

 

 

Collateral Posted Against Derivative Positions

 

 

Net Amount Presented in Balance Sheets

 

March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivative contracts

 

$

357

 

 

$

(357

)

 

$

—

 

 

$

—

 

FTRs

 

 

16

 

 

 

—

 

 

 

(16

)

 

 

—

 

PPA

 

 

130

 

 

 

—

 

 

 

—

 

 

 

130

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivative contracts

 

$

849

 

 

$

(849

)

 

$

—

 

 

$

—

 

PPA

 

 

2,140

 

 

 

—

 

 

 

—

 

 

 

2,140

 
Derivative Gains and Losses in Balance Sheet

The following tables summarize the unrealized and realized gains/losses related to the derivative instruments on the consolidated balance sheets and the consolidated statements of income.

 

 

 

2022

 

 

2021

 

(In thousands)

 

Current and Long-Term Regulatory Asset (Liability)

 

 

Other Current Assets

 

 

Current and Long-Term Regulatory Asset (Liability)

 

 

Other Current Assets

 

Three Months Ended March 31:

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1,

 

$

(617

)

 

$

770

 

 

$

13,989

 

 

$

1,162

 

Unrealized gain

 

 

(11,333

)

 

 

—

 

 

 

(3,588

)

 

 

—

 

Realized gain (loss) reclassified to a deferred account

 

 

1,279

 

 

 

(1,279

)

 

 

(50

)

 

 

50

 

Realized gain (loss) reclassified to income statement

 

 

1,030

 

 

 

776

 

 

 

708

 

 

 

(1,039

)

Balance as of March 31,

 

$

(9,641

)

 

$

267

 

 

$

11,059

 

 

$

173

 
Derivative Gains and Losses in Income Statement

 

 

Realized Losses (Gains)

 

 

 

2022

 

 

2021

 

(In thousands)

 

Fuel for Electric Generation/ Purchased Power

 

 

Cost of Gas Sold

 

 

Fuel for Electric Generation/ Purchased Power

 

 

Cost of Gas Sold

 

Three Months Ended March 31:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivative contracts

 

$

(312

)

 

$

(881

)

 

$

(195

)

 

$

1,022

 

FTRs

 

 

3

 

 

 

—

 

 

 

(256

)

 

 

—

 

PPA

 

 

(616

)

 

 

—

 

 

 

(240

)

 

 

—